What is the regular rate of pay?

Regular rate of pay is the hourly rate used to calculate overtime, including not just base hourly wages but also non-discretionary bonuses, commissions, and certain other compensation. For professional service firms, accurate, regular rate calculation ensures proper overtime payment.

Key characteristics

• Basis for overtime calculation

• Includes more than the base rate

• Non-discretionary bonuses included

• Calculated per workweek

• Must equal at least the minimum wage

• Complex with variable pay

Why it matters for professional service firms

Overtime must be calculated on the regular rate, not just based on the hourly rate. Excluding required components understates overtime owed. Professional service firms paying bonuses or commissions must include these in regular rate calculations for non-exempt employees.

Real-world example

Amanda's non-exempt employee earned $25/hour base plus $400 production bonus for the week. Regular rate calculation: base pay $1,000 (40 hours times $25) plus bonus $400 equals $1,400 total, divided by 40 hours equals $35 regular rate. The employee worked 45 hours. Overtime: 5 hours times $52.50 (1.5 times $35) equals $262.50. Total pay: $1,662.50.